Man sues to stop Woodcliff Lake, BMW tax deal

WOODCLIFF LAKE – A borough resident is suing the municipality over its long-awaited, $3.95 million tax appeal settlement with BMW of North America, based on a sprawling 86-acre campus on Chestnut Ridge Road.

William E. Dolan filed two complaints this month, one in the state's Tax Court and another in Superior Court. Dolan is seeking to reverse and stop the implementation of the BMW settlement, approved by the council Jan. 23, as the settlement hurts the remaining taxpayers in the municipality, according to the complaint filed in Superior Court.

The council last week approved Borough Commercial Tax Appeal Attorney Steven Muhlstock and Borough Attorney Paul Kaufman to defend the borough against the complaints filed in state Tax Court and Superior Court, respectively.

Kaufman said the borough does not think the case has any merit and that the borough will be filing a response soon. He declined to comment further.

The borough's settlement with BMW included refunding the luxury automaker $3.95 million over four years starting in January 2015, without interest. The parties also agreed to set the property's assessment at around $110 million for 2014. For 2015 and 2016, the borough has the ability to raise the assessment to $119 million. The previous assessed value was $180 million.

"My client contends that the tax assessment is below what it should be — that's the core of both proceedings," said Michael Scully, the attorney representing Dolan.

The settlement applied to the numerous tax appeals filed against the borough from 2006 to 2013, though many of BMW's appeals related to farmland rollback taxes were settled in December by a state Tax Court judge, who ruled in the borough's favor.

Dolan believes the "disproportionately low values" of the assessments will cause other borough taxpayers to pay "more than their fair share of the tax burden," according to the complaint.

The complaint also alleges that the refund is not properly chargeable to the town's taxpayers. The borough approved paying for the refund by taking on debt, which would be distributed among taxpayers, the complaint says.

The complaint calls the borough's actions "unjust and unlawful." Dolan also filed an appeal of Woodcliff Lake's BMW assessments with the state's Tax Court to avoid further damages and void existing assessments and establish "the appropriate assessments" for the BMW properties.

Borough officials have hailed the January settlement as a win-win that ended years of litigation, avoided destroying the municipality financially and kept BMW, the town's largest taxpayer, from leaving.

Borough officials also have said that the town had received around $5.375 million from BMW's tax collections while the appeals were pending. But if the carmaker had won its case, the town might have had to refund more than $12 million – a net loss of more than $7 million.

Because of the 2 percent tax levy cap, the borough has to apply the state's Local Finance Board to authorize the debt over several years. For the average borough home, assessed at around $680,000, this could result in about a $230 annual municipal tax increase over a period of seven years, or possibly $380 annually over four years.